Fight for $15 Leader Paid $146,000 to Fight, Not Protest

By now readers of this blog have heard about worker centers and the worker center called Fight for $15 whose mission is to establish a $15 minimum wage for fast food workers. Anecdotally, the Fight for $15 leader (who is the subject of this post) said that $15 was chosen as their preferred minimum wage not because of solid economic theories but because it “made sense.” According to him, “$10 was too low and $20 was too high so we landed at $15.”

Back to your regularly scheduled programming. Fight for $15 staged a protest against McDonalds in Chicago in mid-May. The leader of Fight for $15 is Ken Fells. When Mr. Fells was asked whether he was paid to attend the “March on McDonalds” in May, he said, “No I am not.” This is parsing words at its finest.

Fight for $15 is a worker center affiliated with the Service Employees International Union (SEIU). Fight for $15 is not a union, and thus does not have to file paperwork detailing its income or expenses. The SEIU, on the other hand, is a union and must detail its income and expenses on a Form LM-2. The SEIU’s 2016 LM-2 lists Mr. Fells as its “deputy organizing director” who is “on loan” to the “Fight for $14” campaign with a salary of $146,000 per year.

Later in the interview, Mr. Fells divulged some of the tactics his Fight for $15 activists employ to pressure fast food restaurants. For example, when a restaurant fires an employee, “McDonald’s, Wendy’s, Burger King – these places specialize in selling burgers. We specialize in fighting. So it’s hard for them to fight us and sell burgers at the same time,” he said. “So if they were to fire one of our workers or cut one of our worker’s hours, we try to have a reasonable conversation with them because we’re very reasonable individuals.” If that doesn’t work, then we’ll bring in 150 people and shut their store down day after day after day.”

To date, Fight for $15 has spent millions of dollars trying to disrupt the fast food industry without a single union organizing victory to its credit.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 285-5342 or emailing him at Matt@MattAustinLaborLaw.com. 

President Trump’s Proposed Budget Eliminates Union-Funding Harwood Grant

President Trump’s budget slashed the Department of Labor’s funding from $12.2 billion this year to $9.6 billion next year. This equals a 21% cut. On the chopping block is the DOL’s Susan Harwood Training Grant Program. You don’t know what the Susan Harwood Grant is? I didn’t either.

The Susan Harwood grant gives out grants to nonprofit organizations to train workers in dangerous jobs. At least that’s what it’s supposed to do. Instead, labor unions and labor-affiliated advocacy groups – think worker centers – received millions of dollars from the grant program under President Obama.

Many people think there are problems with Harwood grants. For example, Restaurant Opportunity Center (ROC), a worker center, used grant money to urge employees to take action by “working with worker advocacy organizations to find successful ways to get your rights to decent pay and safer working conditions.” Seems like a blatant plug for union organizing to me.

One question I have is whether federal tax dollar grants should be used to further union organizing efforts. Seems like the House Appropriations Committee in the 114th Congress agrees because it concluded that the Harwood grant program is “inefficient and ineffective in achieving its intended purpose.” It’s intended purpose was to train workers in dangerous jobs not organize unions in the restaurant industry.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at Matt@MattAustinLaborLaw.com.

Will Trump’s DOL Classify Worker Centers as Unions?

I first covered the budding Worker Center movement here. The takeaway from that blog post was:

But worker centers are not “labor organizations” – they are 501(c)(3) charities – so they are not regulated as heavily as unions nor do they pay taxes. Worker centers cannot engage in unfair labor practices and do not have to report income/expenses. They do, however, exert tremendous pressure on companies to yield to union demands during bargaining or foregoing secret ballot elections during a union organizing drive. For example, KIWA executed a corporate campaign against Koreatown store owners complete with picketing, parades, and social disobedience – and won.

Since that 2013 blog post, workers centers have become larger, richer, and more powerful. One of them is the machine behind Fight for $15. Another has been a thorn in Walmart’s side for years. Others have been causing havoc in other industries.

Pro-business groups hope that the Trump administration will scrutinize whether worker centers are labor unions or charities. If labor unions, then they need to play by the same rules as unions. Their ability to skirt certain rules, like financial disclosure reporting requirements, and most National Labor Relations Act laws, have aided the growth of worker centers.

The role of worker centers has grown over the past few years while traditional union membership continues to plummet. Worker centers are filling a void created by the steady decline in union membership, including by advocating for higher minimum wages, exposing alleged worker abuses, and giving employees more voice of at work. For example, while unionization rates dropped to an all-time low again last year, ROC United, a worker center focused on the restaurant industry, saw its revenue more than double in a single year. In 2008, ROC’s revenue was $250,000. By 2013, it had grown to $2.9 million. Last year it took in over $7 million.

Critics have tried in vain to get the Obama Department of Labor to force worker centers to file the same financial disclosures required of unions, like LM-2 reports which track dues and fees collected, detail where unions spend and receive money, and provides information about loans and investments. According to the U.S. Chamber of Commerce, these disclosures would be “useful to try and refute this concept that these union front organizations are amorphous swarms of workers coming together because they’re fed up with abuse from their employers.” Likewise, the International Franchise Association says: “If it looks like a union, acts like a union, and harasses like a union, it should be treated like a union.” In my opinion, dues-paying union members may want to know, and have a right to know, and should know, where their money is going and how much of it is going to finance worker center activities designed largely to help non-union workers.

But I caution pro-business groups against thinking that just because Donald Trump is in the White House that worker centers will be classified as labor unions. George W. Bush’s administration twice ruled that that ROC was not a union. With this precedent, I’m not sure how much of a priority the Trump administration will place on this issue.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at Matt@MattAustinLaborLaw.com.

Unions Seek to Reverse the Elusiveness of Organizing Retail

Since 1980 real wages in retail have fallen by 11% while on-call scheduling, involuntary part-time work, and “clopening” (where workers lock up the store at night and reopen the next morning) have, according to unions, wreaked havoc with workers’ lives. But the retail sector has one of the lowest rates of unionization in the economy – around the 5% mark – resulting with unions that have virtually no influence.

But in 1970s retail had 15% union density. Grocery stores were higher at a staggering 31% in 1983. This begs the question: What went wrong for unions?

When asked this question the typical answer is given, “the general trend towards de-unionization of the U.S. workforce and the hollowing out of the National Labor Relations Act through case law and employer challenges.” But, according to Peter Ikeler, a sociologist at the State University of New York College at Old Westbury and author of the book, Hard Sell: Work and Resistance in Retail Chains, the most important factor in the fall of retail unionism has been employer hostility.

The drumbeat of anti-unionism typically begins as soon as new employees begin their training. New worker orientation at Walmart, the nation’s leading retailer, used to include a video that featured lines like: “The truth is unions are businesses, multimillion-dollar business that make their money by convincing people like you and me to give them a part of our paychecks.” Even smaller, regional chains invest in anti-union propaganda for new hires. According to internal documents provided to In These Times website by an employee of Big Y, the Massachusetts-based grocer warns new hires about signing a union authorization card since the company’s “continued success” would be “jeopardized through third party involvement.”

Unions also share part of the blame, says Ikeler, because they have done a lousy job of keeping workers engaged. In his view, labor unions need to step up their organizing.

Unions need to get back to what unions were in their early New Deal days: more worker-based rather than these large staff-run top-heavy entities that give lots of money to Democratic candidates every few years with relatively little payback.

Ikeler also sees a lot of potential in the worker center model because they give workers a place to go to form communities, talk about work conditions, and plan campaigns. Worker centers also help cultivate a sense of occupational identity in a sector of the economy known for deskilling workers in order to make them more easily replaceable. Per Ikeler, “If workers see themselves as part of an occupational community, they may be more likely to form organizations together and put up collective resistance.” Ikeler continues: “Worker centers cannot replace unions, but the two organization can work together.” They should be able to work together since worker centers are usually owned, funded, and operated by unions.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at Matt@MattAustinLaborLaw.com.

Worker Center Erroneously Alleged Walmart Unlawfully Fired Strikers

This case illustrates how worker centers and labor unions work closely together when trying to organize a company. The UFCW, which has unsuccessfully tried to organize Walmart for years, utilized its worker center OUR Walmart to allege that Walmart committed unfair labor practices when it fired two employees after they participated in demonstrations led by the UFCW-owned worker center. The NLRB found no merit to the allegations, and ruled that one worker was lawfully fired for taking excessive breaks and the other for multiple food safety violations. Worker centers are increasing the pressure against companies by utilizing corporate campaign tactics against many companies in the retail, transportation, fast food, and grocery industries. Worker center training and union avoidance training is critical for non-union companies and should be routinely held to maintain a union free environment.

Worker Center ROC Admits It’s a Modern Union

Jose Oliva, a director for the Restaurant Opportunities Centers United, a prominent worker center, recently explained how worker centers are nonprofit groups that are an alternate form of labor organizing. Most major unions have established and funded their own worker centers to further their own causes.

According to Oliva, a union can collect dues from their members’ paychecks, but a worker center cannot do that. Worker centers do not have a steady flow of income, which means most of their money comes from private foundations – (most of which are funded by union dues).

Because there is a huge growth of worker centers and a sharp decline of traditional unions, Oliva believes workers centers are just third-wave unions. “We had craft unions, then industrial unions in the Industrial Revolution, and now we have a new economy. That new economy has given rise to a new form of unionism that we right now call worker centers.” Oliva went on to admit that one of the major advantages of worker centers is that since they are IRS 501(c)(5) charities, they are not “constrained by the National Labor Relations Act” and do not have to file LM-2s.

UFCW Again Admits it Owns the Corporate Campaign Worker Center OUR Wal-Mart

Unions are required to file annual LM-2s that transparently track union finances and business dealings. The United Food and Commercial Workers’ union (UFCW) recently filed its LM-2 again admitting that it is the front group for OUR Wal-Mart. Specifically, UFCW’s response to question 11(b) states: “The UFCW has a subsidiary organization maintained in Washington DC named the Organization United For Respect at Wal-Mart whose purpose as stated in the by-laws will be the betterment of the conditions of the current and former associates at Wal-Mart Stores, Inc., within the meaning of Section 501(c)(5) of the Internal Revenue Code, and to make Wal-Mart a better corporate citizen.”

Elsewhere in its LM-2, SEIU disclosed that it paid the public relations firm BerlinRosen nearly a quarter of a million dollars from workers’ dues to consult on its Fast Food Forward and Fight for $15 worker campaigns.